Where Has All the Oil Gone?

Oil supply is not infinite. Sooner or later it will run out. The interesting speculation is when that will happen. In a recent publication of ACS Energy and Fuels, several Kuwaiti scientists have studied this matter with a multicycle Hubbert model. The original Hubbert model in 1956, accurately predicted that oil production would peak in the United States around 1970.

The model has since gained in popularity and has been used to forecast oil production worldwide. However, recent studies show that the model does not take into account more complex oil production cycles of some countries. Those cycles can be heavily influenced by technology changes, politics, social upheavals, and other factors.

In 2008 there were dramatic and unprecedented fluctuations in oil prices. The price per barrel rose to $140 which was an all time high; then the price plunged to less than $50 per barrel by the end of the year losing more than 64 percent of the maximum price in less than a three months period.

The supply of crude oil in the international market oscillated accordingly. This behavior affected oil production in all exporting countries.

Yet despite the fluctuations demand for crude oil in some developing countries, such as China and India, has increased in the past few years because of the rapid growth in the transportation sector and consumer demand. The rapid growth in fuel demand has forced policy makers worldwide to include uninterrupted crude oil supply as a vital priority in their economic and strategic planning. Yet world oil supplies have to come to an end.

Forecasting the future is always difficult. With oil some new supply source may be discovered in some unsuspected geographical location as one example. Demand may also increase and wars may consume yet more. Alternate energy sources may also be used or discovered.

Accurate prediction of oil production is affected by fluctuating ecological, economical, social, and political factors, which impose many restrictions on its exploration, transportation, and supply and demand.

The Kuwait study was done to develop a model to predict world crude oil supply with better accuracy than the existing models.

The original Hubbert peak theory posits that for any given geographical area, from an individual oil producing region to the planet as a whole, the rate of petroleum production tends to follow a bell shaped curve.

Choosing a particular curve determines a point of maximum production based on discovery rates, production rates and cumulative production. Early in the curve (pre-peak), the production rate increases because of the discovery rate and the addition of infrastructure. Late in the curve (post-peak), production declines because of resource depletion. Hubbert’s Peak was achieved in the continental US in the early 1970s. Oil production peaked at 10.2 million barrels a day. Since then, it has been in a gradual decline.

The new Kuwait approach originates from the Hubbert model, it overcomes the limitations and restrictions associated with the original Hubbert model. As opposed to Hubbert single cycle model, this model has more than one cycle depending on the historical oil production trend and known oil reserves.

The world production is estimated to peak in 2014 at a rate of 79 million barrels per day. OPEC has a remaining reserve of 909 barrels, which is about 78 percent of the world reserves. OPEC production is expected to peak in 2026 at a rate of 53 million barrels per day. On the basis of 2005 world crude oil production and current recovery techniques, the world oil reserves are being depleted at an annual rate of 2.1 percent.

Other models predict peak oil production to occur anywhere from today to 2030. The exact date, of course, will not be known until it happens. Dramatic fluctuation in oil prices will continue and a new lifestyle for all of us will have to happen sooner or later.

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